Judge: City of Neosho waited too long to question TDD validity

The Neosho Transportation Development District has already been determined valid and the City of Neosho waited too long to question that validity, according to a court order released Wednesday.

Whitney Saporito

The Neosho Transportation Development District has already been determined valid and the City of Neosho waited too long to question that validity, according to a court order released Wednesday.

The City of Neosho and the Neosho TDD appeared before Newton County Division III Associate Circuit Court Judge Kevin Selby on Friday, Nov. 30, in response to a petition filed by the city alleging that the TDD was an invalid entity.

Selby ruled in favor of the TDD, basing his ruling on the doctrine of laches, essentially meaning the city had waited too long after the formation of the TDD to bring their concerns forward.

Following that hearing, Richard Davidson, Neosho mayor, said the city would wait to determine its next move until the judge released a court order.

On Wednesday, Davidson, who is out of the country on business, said via email that he would first confer with city attorney Steve Hays before commenting on the content of the court order.

The order states that if the TDD were invalid or unlawful, the city should have been aware of that in 2009, at the time a petition was filed to form the entity.

“The Court finds that, over four years after the District had first been proposed and approximately a year and a half after the Court had first adjudged the District validly formed in these proceedings, certain parties began to believe the District was not valid and should not exist,” the order states.

The city filed their petition in August, and questioned the district’s validity based on the state statute subsection the TDD was formed under and on who acts as voters within the TDD.

The TDD was formed under subsection 2 of RSMo 238.207, with the City of Neosho acting on equest as the local transportation authority.

The court order goes on to state that by entering into agreements, the city appeared to support the validity of the TDD. However, the Neosho City Council voted in November to rescind the ordinance that authorized them to enter into a cooperative agreement with the TDD, thereby making the agreement void.

“The city repeatedly and consistently represented to this Court prior to August 21, 2012 that it agreed with and approved of the District’s validity,” the order said.

The court order said the TDD’s defense, based on the doctrine of laches, “is highly appropriate in this case in view of the unquestionable delay on the part of the City in raising its claim as to the District’s validity.”

The court order also refers to a 1978 Missouri Supreme Court case, Cherry v. City of Hayti Heights, in which the court ruled that a citizen could not challenge the legal existence of the city of Hayti Heights almost two years after it had been incorporated.

The court order also states that the TDD’s legal counsel showed that if their party was ruled against, that ruling could be detrimental to the district as well as to the community, while the City of Neosho’s argument was called “speculative.”“The District has made a compelling showing of foreseeable detriment not only to itself, but to the community in the event the Court were to grant the City the relief it seeks and the District’s highway and street improvement projects were not completed upon the terms set forth in the District’s Cost-Share Agreement with MHTC (The Missouri Highways and Transportation Commission),” the order reads.

The order also notes the district’s financial obligations and states that those obligations were made under a cost-share agreement that is reliant on the TDD being a valid entity.

The TDD has been collecting a half-cent sales tax within its borders, which stretch from Waldo Hatler Drive to Industrial Drive, and from Kodiak Road to just east of Laramie Lane, since January 1.

The city argued that based on their assertion that the TDD is invalid, the continued collection of tax monies by that entity could result in future lawsuits brought forth by taxpayers. However, the court order states that that argument was not sufficient to show potential detriment to the city or the public.

“While the City argued that it may suffer detriment in the form of future taxpayer lawsuits regarding the validity of the District and its sales tax, the Court finds and concludes that any such claimed detriment is speculative and does not rise to the level of real detriment sufficient for this Court to not apply the doctrine of laches,” the order states.

The order goes on to point out that no taxpayers have objected to the formation of the TDD, despite it being highly publicized.

“The court concludes that the City in this case is barred by the doctrine of laches from challenging the validity of the District, a separate and distinct public entity which the City itself petitioned to create, particularly since the city knew or should have known of the matters about which it now complains from the time it first petitioned this court to create the district,” the order concludes.

According to the order, the City of Neosho will be responsible for paying the court costs.